Refinancing in Australia: Everything You Need to Know

At our Wavell Heights mortgage broking office, we get a steady stream of questions about refinancing. So let’s break it all down — here’s a clear, no-nonsense guide to refinancing your home loan in Australia.

How often should I review or refinance my home loan?

I recommend reviewing your home loan annually, on its anniversary. Any more often and most banks won’t move — think: “computer says no!”

But let’s face it — reviewing your home loan sounds like a snooze. The good news? At Loan Market Wavell Heights, we’ve got a dedicated staff member who proactively reviews each client’s loan every 12 months to make sure your bank isn’t charging more than they should.

Not yet our client? No problem. Reviewing your home loan is straightforward.

First, it’s important to be clear about what you want to achieve. You might be after:

    • A lower interest rate
    • Lower monthly repayments
    • Access to extra funds (also known as equity release or cash out)
    • A restructure — maybe adding an offset account or fixing your interest rate

Once we know your goals, finding the right strategy becomes simple.

We usually start with a quick phone call (you can book a Home Loan Health Check here). All we need to know is your current bank, loan amount, and interest rate. In just 15 minutes, we’ll model what kind of savings might be available and give you the right language to use with your bank.

No one wants to refinance, so let’s make sure your current lender is offering you their best deal before we kick off a full application elsewhere.

What are the costs involved in refinancing?

It’s not free to move from bank to bank. I usually allow around $1,000 in switching costs per property. That typically covers:

    • Discharge or admin fees from your current lender
    • Titles Office registration (removing the old bank and adding the new one)
    • Establishment fees with the new lender

The good news? In most cases, we’re paid by the new bank, so there’s no broker fee for you (yay!).

Banks used to hand out cashback offers (like $2,000!) to help offset these costs — but most dropped those incentives in 2024. Some lenders still offer limited-time cashback promotions, but they don’t always come with a competitive interest rate. We’ll help you weigh that up.

Because refinancing has upfront costs, it’s critical that the move is in your best interest both now and in the future. Some banks lure you in with low rates, only to become uncompetitive a year or two later. Others are more consistent. If you’re someone who prefers to “set and forget,” let us know — we’ll keep that in mind when making recommendations.

My fixed rate is expiring — do I have to refinance?

Not necessarily.

When a fixed term ends, your loan usually reverts to a variable interest rate — called a reverting rate. Some of these are awful. But that’s not always the bank’s final offer.

Sometimes, a quick phone call asking them to “sharpen the pencil” is all it takes to get a better deal. This works best if you’ve spoken with us first — we’ll tell you what other banks are offering so you can quote a real competitor. That makes your request much more powerful.

Even better — this kind of request isn’t considered “credit critical”, so it usually won’t require any new income documentation. It can often be handled over the phone in one call.

I’d like to access some equity — is that a refinance?

Maybe!

If you’re looking to release equity (cash out), we have two main options:

    • Apply for a top-up loan with your existing lender
    • Refinance your whole loan to a new lender that allows equity release

Generally, you can’t have your main home loan with one lender and then do an equity release through another. We’ll usually need to keep all the loans against the one property with the same bank.

Doesn’t refinancing reset my loan term back to 30 years?

Banks love you to think this — maybe because it stops people from leaving.

The reality? You don’t have to start over. If you're five years into your current loan, we can absolutely set up the new loan over a 25-year term (or whatever's left). That way, you’re not adding unnecessary interest.

That said, if you’re going through a change of life stage — say, you've had kids and want lower repayments, or you’re borrowing a bit extra for a bigger car or renovation — it can make sense to extend your loan term to 30 years for now. We'll always discuss what works best for your situation.

The RBA has cut rates — why hasn't my bank reduced my repayments?

Good question — they probably have, but not how you think.

If the RBA has reduced the official cash rate, your bank may have dropped your interest rate too — but unless you’ve asked them to reduce your repayments, the bank will just keep deducting the same amount each month.

Check your internet banking under “loan details.” You might find your rate has gone down, but your repayments haven’t changed. You can often update this yourself online or give the bank a quick call to request the new minimum repayment amount.

But keep in mind — when rates rise, the bank will automatically increase your repayments whether you ask or not.

I’ve got more questions!

We love questions! If you’d like to chat through your options, we’d love to help. Book your next appointment here.

Bonus FAQs: What else should I consider before refinancing?

Here are a few more common questions we get from Brisbane clients thinking about refinancing:

Q: Will refinancing affect my credit score?

A: It can — but only slightly. Your credit report will show a new application, which might temporarily dip your score, but this usually recovers quickly if you maintain healthy repayments.

Q: Can I refinance if I'm self-employed or on maternity leave?

A: Yes, but it can be trickier. Some lenders are more flexible than others — we’ll guide you through which banks can work with your current income situation.

Q: How much equity do I need to refinance?

A: Most banks like to see at least 20% equity, but some allow refinancing with as little as 10%, depending on your situation. We’ll assess your loan-to-value ratio (LVR) to make sure the numbers stack up.

Q: How long does refinancing take?

A: On average, 2 to 4 weeks from application to settlement — but it depends on your current lender, the new bank’s processing time, and how quickly documents are returned. We manage the process to keep things moving.


Published: 18/6/2025
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